- Company raises adjusted earnings guidance by 3 cents to a new range of $1.46 to $1.48 per diluted share- Company reaffirms free cash flow guidance of $700 million to $725 million- Adjusted EBITDA margins expand to 30.9 percent- Company declares quarterl
Nov. 2, 2009 (PR Newswire) -- PHOENIX, Nov. 2 /PRNewswire-FirstCall/ -- Republic Services, Inc. (NYSE: RSG) today reported net income of $120.5 million, or $0.32 per diluted share, including merger-related gains and costs and other charges, for the three months ended September 30, 2009, versus $88.7 million, or $0.48 per diluted share, for the comparable period last year. Republic's third quarter 2009 financial results include Allied Waste Industries, Inc. (Allied) which merged with Republic on December 5, 2008.
Republic's income before income taxes for the three months ended September 30, 2009, includes $0.9 million ($0.00 per diluted share) of a net loss on disposition of assets, $12.3 million ($0.02 per diluted share) of restructuring charges, $31.8 million ($0.05 per diluted share) of loss on extinguishment of debt, $8.9 million ($0.01 per diluted share) of costs to achieve synergies and a gain of $8.8 million ($0.01 per diluted share) related to insurance recoveries resulting from remediation activities. Excluding these items, net income for the three months ended September 30, 2009 would have been $149.3 million or $0.39 per diluted share. Income before income taxes for the three months ended September 30, 2008 includes $3.2 million ($.01 per diluted share) of integration costs related to the Allied merger. Excluding these costs, net income for the three months ended September 30, 2008 was $90.7 million or $0.49 per diluted share.
Operating income before depreciation, amortization, depletion and accretion for the three months ended September 30, 2009 was $627.4 million compared to $248.9 million for the comparable period in 2008. Excluding the net loss on disposition of assets, restructuring charges, costs to achieve synergies, and insurance recoveries recorded during 2009 and the integration costs recorded during 2008, operating income before depreciation, amortization, depletion and accretion for the three months ended September 30, 2009 was $640.7 million, or 30.9% as a percentage of revenue, compared to $252.1 million, or 30.2% as a percentage of revenue, for the comparable 2008 period.
Revenue for the three months ended September 30, 2009 increased to $2,073.5 million compared to $834.0 million for the same period in 2008. Core price for the three months ended September 30, 2009 (assuming the merger with Allied had occurred on January 1, 2008) increased 2.8%. Offsetting the core price growth of 2.8% for the three months ended September 30, 2009 were decreases of 10.1% in core volume, 1.9% of commodity pricing and 3.6% in fuel recovery fees.
For the nine months ended September 30, 2009, net income was $459.4 million, or $1.21 per diluted share, compared to $205.5 million, or $1.11 per diluted share, for the comparable period last year. Republic's income before income taxes for the nine months ended September 30, 2009, includes $144.3 million ($0.23 per diluted share) of net gains on disposition of assets, $55.9 million ($0.09 per diluted share) of restructuring charges, $31.8 million ($0.05 per diluted share) of loss on extinguishment of debt, $31.8 million ($0.05 per diluted share) of costs to achieve synergies and a gain of $8.8 million ($0.01 per diluted share) related to insurance recoveries resulting from remediation activities. Excluding these items, net income for the nine months ended September 30, 2009 would have been $438.6 million or $1.16 per diluted share.
Income before income taxes for the nine months ended September 30, 2008 includes a $34.0 million charge ($0.12 per diluted share) related to environmental conditions at our Countywide Recycling and Disposal Facility in Ohio, a $35.0 million charge ($0.12 per diluted share) related to estimated costs to comply with a consent decree and settlement agreement related to the Sunrise Landfill in Nevada and $3.2 million ($0.01 per diluted share) of integration costs related to the merger with Allied. Excluding these charges and costs, net income for the nine months ended September 30, 2008 was $251.3 million or $1.36 per diluted share.
Operating income before depreciation, amortization, depletion and accretion for the nine months ended September 30, 2009 was $1,986.7 million compared to $635.2 million for the comparable period in 2008. Excluding the net gain on disposition of assets, restructuring charges, costs to achieve synergies and insurance recoveries recorded during 2009 and the remediation charges and integration costs recorded during 2008, operating income before depreciation, amortization, depletion and accretion for the nine months ended September 30, 2009 was $1,921.3 million, or 31.0% as a percentage of revenue, compared to $706.4 million, or 28.9% as a percentage of revenue, for the comparable 2008 period.
Revenue for the nine months ended September 30, 2009 increased to $6,200.1 million compared to $2,440.7 million for the same period in 2008. Core price for the nine months ended September 30, 2009 (assuming the merger with Allied had occurred on January 1, 2008) increased 3.2%. Offsetting the core price growth of 3.2% for the nine months ended September 30, 2009 were decreases of 9.6% in core volume, 2.4% of commodity pricing and 2.6% in fuel recovery fees.
During the three months ended September 30, 2009, the Company completed the divestiture of assets and related liabilities required under the settlement reached with the U.S. Department of Justice in connection with the Allied merger. After tax proceeds of $374.6 million related to these divestitures were used to repay amounts borrowed under the Company's credit facilities.
"Based on our continued solid performance, we are increasing our full year earnings guidance for the second time this year," said James E. O'Connor, Chairman and Chief Executive Officer of Republic Services, Inc. "Our new, full-year adjusted earnings guidance is a range of $1.46 to $1.48 per share, which represents a three cent per share increase over our previous guidance. We are also reaffirming our full-year free cash flow guidance of $700 to $725 million. I am especially pleased to see a 110 basis point increase in our adjusted year-over-year margins."
Commenting on merger-related synergies, Don Slager, President and Chief Operating Officer, stated, "We are realizing our synergy savings ahead of schedule. Our field organization continues to execute our merger strategy while remaining focused on revenue and cost control initiatives," said Mr. Slager. "Providing excellent customer service, managing operational costs and increasing customer retention remain key focal points for the organization."
Quarterly Dividend
Separately, Republic announced that its Board of Directors has approved a regular quarterly dividend of $0.19 per share to be paid on January 18, 2010 to shareholders of record on January 4, 2010.
Republic Services, Inc. is a leading provider of services in the domestic, non-hazardous solid waste industry. The Company provides non-hazardous solid waste collection services for commercial, industrial, municipal, and residential customers through 380 collection companies in 40 states. It also owns or operates 236 transfer stations, 199 solid waste landfills and 78 recycling facilities. Republic serves millions of residential customers under contracts with more than 3,000 municipalities for waste collection and residential services. It also serves commercial customers throughout its expansive service area. For more information, visit the Republic Services web site at www.republicservices.com
SUPPLEMENTAL UNAUDITED FINANCIAL INFORMATION
AND OPERATING DATA
(in millions, except per share amounts and percentages)
REPUBLIC SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
September December
30, 31,
2009 2008
---- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $107.3 $68.7
Accounts receivable, less allowance for
doubtful accounts of $54.2 and $65.7 as
of September 30, 2009 and December 31,
2008, respectively 928.2 945.5
Prepaid expenses and other current assets 189.3 174.7
Deferred tax assets 179.5 136.8
----- -----
Total current assets 1,404.3 1,325.7
Restricted cash and marketable securities 254.9 281.9
Property and equipment, net 6,585.6 6,738.2
Goodwill, net 10,534.0 10,521.5
Other intangible assets, net 517.7 564.1
Other assets 233.6 490.0
----- -----
Total assets $19,530.1 $19,921.4
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $458.8 $564.0
Notes payable and current maturities
of long-term debt 242.5 504.0
Deferred revenue 332.7 359.9
Accrued landfill and environmental costs,
current portion 188.4 233.4
Accrued interest 110.5 107.7
Other accrued liabilities 765.1 796.8
----- -----
Total current liabilities 2,098.0 2,565.8
Long-term debt, net of current maturities 6,813.3 7,198.5
Accrued landfill and environmental costs,
net of current portion 1,251.0 1,197.1
Deferred income taxes and other
long-term liabilities 1,323.2 1,239.9
Self-insurance reserves, net of current
portion 303.7 234.5
Other long-term liabilities 186.4 203.1
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.01 per
share; 50.0 shares authorized; none
issued - -
Common stock, par value $0.01 per share;
750.0 shares authorized; 394.6 and 393.4
issued, including shares held in
treasury, as of September 30, 2009 and
December 31, 2008, respectively 4.0 3.9
Additional paid-in capital 6,289.7 6,260.1
Retained earnings 1,720.1 1,477.2
Treasury stock, at cost (14.9 shares
as of September 30, 2009 and
December 31, 2008) (457.2) (456.7)
Accumulated other comprehensive loss, net
of tax (4.4) (3.1)
---- ----
Total Republic Services, Inc.
stockholders' equity 7,552.2 7,281.4
Noncontrolling interests 2.3 1.1
----- -----
Total stockholders' equity 7,554.5 7,282.5
------- -------
Total liabilities and stockholders'
equity $19,530.1 $19,921.4
========= =========
REPUBLIC SERVICES, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------- -----------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue $2,073.5 $834.0 $6,200.1 $2,440.7
Expenses:
Cost of operations 1,207.5 499.5 3,643.1 1,553.5
Depreciation, amortization and
depletion 218.3 77.3 658.7 226.9
Accretion 22.2 4.6 67.4 13.5
Selling, general and
administrative 225.4 85.6 658.7 252.0
Loss (gain) on disposition of
assets, net 0.9 - (144.3) -
Restructuring charges 12.3 - 55.9 -
---- ---- ---- ----
Operating income 386.9 167.0 1,260.6 394.8
Interest expense (144.8) (22.6) (448.8) (65.1)
Loss on extinguishment of debt (31.8) - (31.8) -
Interest income 0.5 2.6 1.7 7.9
Other income (expense), net 1.3 (1.6) 2.8 (0.7)
---- ---- ---- ----
Income before income taxes 212.1 145.4 784.5 336.9
Provision for income taxes 91.1 56.7 323.9 131.4
----- ----- ----- -----
Net income 121.0 88.7 460.6 205.5
Less: net income
attributable to
noncontrolling
interests (0.5) - (1.2) -
---- ---- ---- ----
Net income attributable to
Republic
Services, Inc. $120.5 $88.7 $459.4 $205.5
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Basic earnings per share
attributable to Republic
Services, Inc. stockholders:
Basic earnings per share $0.32 $0.49 $1.21 $1.13
===== ===== ===== =====
Weighted average common
shares outstanding 379.7 182.3 379.3 182.6
===== ===== ===== =====
Diluted earnings per share
attributable to Republic
Services, Inc.
